AP South, Cleveland Draw Congestion Relief Proposals

AP South and the Cleveland interface attracted the most attention in PJM’s inaugural window for proposed market efficiency upgrades.

PJM staff provided the Transmission Expansion Advisory Committee last week with a summary of 17 proposals ranging from $200,000 to $64 million.

Merchant developer LS Power was the most ambitious, proposing four projects totaling $181 million in eight zones. Transource (American Electric Power and Great Plains Energy) was second, proposing three projects in the AEP and ATSI zones totaling $135.5 million.

The three incumbent utilities that took part — Commonwealth Edison, Dominion Virginia Power and FirstEnergy — all stayed at home, with proposals in their own transmission zones. Duke (with partner American Transmission Co.) did the same, proposing one project in the Duke Ohio-Kentucky zone.

AP South

AP South attracted seven congestion relief proposals.

Transource proposed two alternatives to address congestion at AP South and the AEP-Dominion interface. The cheaper option features a 500 kV substation with series capacitors at a cost of $39.3 million. A second builds on the first with additional series compensation at an extra $24 million.

Dominion proposed three projects incorporating Thyrister-controlled series capacitors at costs ranging from $20.1 million to $24.6 million (total cost $69.4 million).

FirstEnergy and LS Power made pitches for AP South and the Hunterstown 230/115 kV line with projects of $54.3 million and $61.7 million, respectively.

Separately, LS Power proposed a new Hunterstown-Cumberland 230 kV line and substation improvements for $63.9 million. FirstEnergy proposed spending $8 million to add a 230/115 kV transformer and reconductor the Hunterstown-Oxford 115 kV line.

Cleveland Interface

Projected Annual Conjestion Costs (Source: PJM Interconnection, LLC) — (Source: PJM Interconnection, LLC)

FirstEnergy, LS Power and Transource each proposed projects to relieve congestion at the Cleveland Interface.

The most expensive is FirstEnergy’s $61.7 million proposal to improve a 138 kV substation in the ATSI zone.

LS Power’s $44.9 million project, which includes the ATSI and PENELEC zones, would add a new Erie West–Ashtabula 345 kV line and a 345/138 kV transformer.

Transource offered the least costly project, a new 138 kV substation in the ATSI zone at a cost of $32.9 million.

Next Steps

PJM’s request for congestion relief proposals was its first under Order 1000, in which the Federal Energy Regulatory Commission sought to increase competition by largely eliminating utilities’ monopoly over transmission development in their territories.

Proposals must clear a minimum 1.25 benefit-to-cost threshold to be considered by the Board of Managers for inclusion in the Regional Transmission Expansion Plan. PJM staff will review the projects through January and make recommendations to the Board in February.

PJM will conduct independent cost reviews on projects exceeding $50 million and on those below $50 million that have tight benefit-cost margins, said PJM’s Paul McGlynn.

November 12, 2013

Summer 2013 Load Growth Fastest Since Recession

PJM’s weather normalized summer peak increased 950 MW in 2013, the largest increase since load growth resumed after the recession.

The 0.6% increase over 2012 is “no great shakes but moving in the right direction,” PJM’s John Reynolds told the Planning Committee during a briefing last week.

The peak was 0.2% (368 MW) below PJM’s forecast. “It’s been a challenging time for us for load forecasting since the recession,” said Steve Herling, vice president of planning. “The primary input is econometrics — over which we have no control.”

Peak diversity for 2013 as 0.3%, much lower than the forecasted 4.3%, as a result of the single RTO-wide heat wave July 15-19.

It was the first summer that the top five coincident peaks have come in the same calendar week since PJM started collecting the data. “The entire story of the summer of 2013 can be told in one week in the middle of July,” Reynolds said.

November 12, 2013

PC OKs Move to Flag Transmission Upgrades Earlier

The Planning Committee approved a manual change that will result in PJM identifying potential transmission upgrade requirements earlier in the study process.

In past years, studies identified many reinforcements which were ultimately not needed as projects dropped out of the backlogged transmission interconnection queue. As the backlog has been reduced, however, some projects have cleared the Impact Study phase without any apparent violations, only to have violations indicated when they are evaluated at 100% in the Facilities Study.

As a result, PJM plans to eliminate the 19% probability for Feasibility Studies and replace it with the 53% currently used for Impact Studies. Impact Studies will use the 100% probability. The changes will be incorporated in Manual 14B. (See Transmission Studies to Flag Upgrades Earlier.)

November 12, 2013

PJM Kicks Off Grid 20/20 Conference

PJM CEO Terry Boston and Federal Energy Regulatory Commissioner Cheryl LaFleur kicked off PJM’s third annual Grid 20/20 conference in Philadelphia last night.

In keeping with the theme of this year’s conference, LaFleur told an audience of about 100 about the need to create a “culture of resiliency.”

“When there is a problem on the grid, very rarely is it the result of one thing. It’s a succession of mistakes where if you had defense in depth it could have been stopped,” she said. “There has to be a line of sight between what people are doing and the bigger issues…These little thing will add up to the big things.”

About 180 people gathered for today’s daylong session at the Sheraton Society Hill.

November 12, 2013

Company Briefs

Carlyle Group closed on its purchase of the 823-MW Red Oak combined-cycle plant in New Jersey from Energy Capital Partners, bringing to 11 the number of plants it has bought since acquiring Cogentrix Energy Power Management late last year. More: Carlyle Group

DTE Shakes Up Senior Management

Steve Kurmas, DTE Energy president — Steve Kurmas

DTE Energy named five executives to new positions, effective Dec. 30. Steve Kurmas becomes DTE Energy president and COO; Jerry Norcia president and COO of DTE Electric and Gas & Storage Pipelines; Dave Meador, DTE Energy vice chairman and chief administrative officer; Peter Oleksiak DTE Energy senior vice president and CFO; and Mark Stiers president and COO of DTE Gas. More: DTE Energy

Duke Utilities Eye Renewables Business

Having decided its regulated utilities should get much more into renewables, Duke Energy has established a group to determine how they should do it – by building, owning capacity or partnering. Duke’s utilities may take different approaches, says Ron Caldwell, who heads the new group, which is focusing initially on solar. Getting renewables into the utility mix is “the next place for our generation portfolios to evolve to,” Caldwell said. More: Charlotte Business Journal

Riverbend Demolition Set

Riverbend Steam Station (Source: Duke Energy)

Duke Energy will begin dismantling the 84-year-old Riverbend station in North Carolina this fall and level the powerhouse and chimneys in 2016. The company shut the little-used 454-MW plant in April as part of its coal plant-retirement program, and now has outlined permanent closure plans. Environmentalists will watch closely how Duke handles coal ash ponds at the site. More: Charlotte Observer

Exelon Reaps up to $100 Million in PTCs

Exelon continues to take advantage of the production tax credit for wind power even as it protests the PTC as a market distorter, particularly damaging to its giant nuclear fleet’s revenue. A Bloomberg New Energy Finance analyst pegged Exelon’s own wind PTCs for this year at $75 million to $100 million, based on the company’s 1.3 GW of wind projects. To environmentalists’ criticism, Exelon says it has a fiduciary responsibility to its shareholders to take the tax credits, but it opposes all market-distorting subsidies. Although Exelon has suffered this year from low power prices, Morningstar analysts say the company’s prospects are good because its low-carbon nuclear fleet will be valuable for years to come. More: Greenwire; Forbes

FirstEnergy Adds $2.8 Billion to Spending Plan

FirstEnergy’s board approved $2.8 billion for transmission system upgrades, on top of the $700 million it set earlier this year. FE sees most of its growth coming from transmission investment, CEO Anthony Alexander said. The company plans to cut the sales force of FirstEnergy Solutions, its unregulated subsidiary, to further reduce its market risk. More: The Plain Dealer

Seneca Pump Hydro plant in Warren, PA (Source: FirstEnergy)

FE Gets FERC Approval for Hydro Asset Sale

FirstEnergy companies won Federal Energy Regulatory Commission approval to sell 527 MW of hydropower facilities to LS Power Development. The plants include the 451-MW Seneca Pumped Storage facility in Warren, Pa., and assets in Virginia and West Virginia. FirstEnergy said in May that it would sell up to 1,240 MW of unregulated hydro assets. More: Electric Light & Power

NRG to Supply Phila. Convention Center

NRG Energy, which entered the residential retail market in Philadelphia in September, has won a big commercial customer in the city. The Pennsylvania Convention Center will buy its approximately 26.5 million MWh a year of power from NRG Business Solutions beginning next year. A competitive process resulted in choice of the NRG Energy unit, which is to provide 25% of the power from renewable sources. This is the first renewable power buy for the center, which later this month will host the world’s largest conference dedicated to green building. More: MarketWatch

November 12, 2013

PJM to Order Temperature Adjustments on Steam Units

PJM will require all steam generators to adjust their capacity ratings based on summer peak load conditions under manual changes outlined to the Planning and Market Implementation committees last week.

Manual 21 currently requires such temperature corrections only for combustion turbines and combined cycle units. The revisions will extend the requirement to coal and nuclear steam units.

About 60% of steam units already perform temperature corrections, with half increasing their capacity ratings and half reducing them, said PJM’s Tom Falin. The average adjustments were 0.5% with the largest adjustment 2%.

PJM also will begin requiring hydropower and pump storage units to perform their annual capacity tests — now allowed to be conducted any time — during the summer.

The adjustments can affect generators’ installed capacity values as well as capacity interconnection rights.

PJM plans to implement the changes after seeking endorsement by the Markets and Reliability Committee in the first quarter of 2014.

The changes will be incorporated in PJM’s planning studies in summer 2014, with a likely transition period before use for markets purposes.

November 12, 2013

State Briefs

Large-Eddy Simulation results. (Source: Cristina Archer, PhD; University of Delaware)

Stagger Turbines to Raise Output

A University of Delaware researcher says more generous spacing and staggered arrangement of turbines could raise a wind farm’s output by 13% to 33% over conventional arrangements. The issue is pertinent to the state, where offshore wind development is a yet-unrealized goal.

More: ABC Environment; The Naked Scientists

ILLINOIS

Feed-in Tariff Proposed for Chicago Efficiency

The Chicago Infrastructure Trust has proposed a kind of feed-in tariff to help the municipal buildings use less energy. The trust said its plan could help Commonwealth Edison meet the state’s energy efficiency targets, which the utility said it cannot meet with funds from an existing surcharge.

More: Crain’s Chicago Business

KENTUCKY

Coal being loaded into a hopper (Source: James River Coal)

James River Idles More Coal Mines

James River Coal idled four Kentucky mines at its Buckeye complex, eliminating 1.3 million short tons of annual thermal coal production on top of the 3.7 million tons it idled in September. The company might restart the Buckeye production if markets warrant it, but the earlier shutdowns are meant to be indefinite.

More: Reuters

MICHIGAN

30% Renewables Said Possible By 3035

The Public Service Commission and Michigan Energy Office have told Gov. Rick Snyder that the state could get 15% of its power from renewables by 2020 and 30% by 2035. The agencies will deliver reports on other power issues later, as part of Snyder’s effort to gather information for possible legislative action.

More: North American Windpower

NEW JERSEY

Business Coalition Can Keep Fighting PSE&G Plan

A big-business coalition has legal standing to oppose the Energy Strong program Public Service Electric & Gas is proposing to storm-proof its grid, the Board of Public Utilities ruled in rejecting a PSE&G challenge to the group. The coalition of large energy users object to the utility’s plan to fund the $3.9 billion program with ratepayer money on an ongoing basis instead of submitting the expenses for scrutiny and reimbursement afterward.

More: The Record

NORTH CAROLINA

Waste Argument Aired in NRC Hearing

Anti-nuclear activists and industry representatives wrangled over fundamental issues as the Nuclear Regulatory Commission held one of a series of hearings about its “waste confidence rule,” which governs storage of spent fuel. The Charlotte meeting drew a crowd, spurred by proximity to two Duke Energy nuclear plants. The NRC is weighing its rule, which a federal appeals court vacated last year.

More: The Charlotte Observer

PENNSYLVANIA

Cities, Towns Tackle Solar Issues

Municipalities in Allegheny and Beaver counties have begun to pass solar panel policies to be prepared as interest in installations increases. The municipalities participated last year in a project to develop a model ordinance.

More: Pittsburgh Tribune-Review

FE Pa. Utilities File Procurement Plans

FirstEnergy’s four Pennsylvania utilities sent the Public Utility Commission a proposal for buying default-service supply beginning June 2015. CRA International would run quarterly auctions starting in October 2014 and have a bidding process for supply of renewable energy credits.

More: FirstEnergy

November 12, 2013

Federal Briefs

Wyoming Republican Sen. John Barrasso has challenged Federal Energy Regulation Commission Chairman Jon Wellinghoff’s plan for recusing himself from decisions involving Stoel Rives law firm clients before he leaves FERC for a position with that firm. Echoing concerns that others have raised, Barrasso asked why the chairman has not recused himself from broader matters that could affect Stoel Rives’ current and future clients.

More: Sen. Barrasso; Greenwire

Utech New Obama Climate Adviser

Dan Utech, White House deputy energy and climate adviser since 2010, has moved up to succeed Heather Zichal, who left her climate adviser position last week. Utech is a former adviser to Sen. Hillary Clinton and aide to the Senate Environment and Public Works Committee.

More: The Hill

‘Social Cost of Carbon’ Revisited

The Obama administration is taking new comments on its determination of the social cost of carbon, a metric it uses to assess the benefits of greenhouse gas regulations. Industry has attacked the SCC levels set in May for lacking public input. “Minor technical corrections” since then have resulted in a cost of $37/metric ton of carbon dioxide in 2015, down from $38, the White House said in inviting comment on the matter.

More: The Hill

Maryland, Illinois in ACEEE Top 10

ACEEE 2013 Energy Efficiency State Scorecard Rankings Map (Source: aceee.org)

For the first time, Illinois made it into the American Council for an Energy-Efficient Economy’s top 10 states whose policies and programs support energy efficiency. Just above Illinois is Maryland at No. 9. Of other PJM states, Ohio at No. 18 is among a handful of “most improved” states, joined by No. 46 West Virginia. Pennsylvania, at 19, was recognized for “recent concentrated efforts.”

More: ACEEE

$84 Million for CCS Projects

The Department of Energy is investing $84 million in 18 carbon capture and storage R&D projects to reduce costs and improve the efficiency of CCS. Among them are a bench-scale project at Media and Process Technology in Pittsburgh and a pilot-scale project at the Gas Technology Institute in Des Plaines, Ill. The Environmental Protection Agency has called CCS a viable technology for future coal plants to meet the agency’s greenhouse gas regulations.

More: The Hill; DOE

Coal Has Brief Future, Study Says

Coal’s future is much shorter than the 200 years that government predicts, according to a Clean Energy Action study. The group said only 20% of remaining coal reserves will be economically recoverable. Ohio, where coal prices have risen 7.8% annually since 2004, is one of 16 states past their peak production years, according to the study.

More: Columbus Business Journal

Some See Gas Boom Petering Out Soon

Some experts are raining on the natural gas and oil production boom, saying production bonanzas from fracking are coming from only a few “sweet spots” that will play out in the next few years. Other experts disagree strongly, in part because they see technology developing fast.

More: USA Today

CO2 Strategy Can Include Co-firing with Wood

Firing wood with coal can help power producers cut their carbon dioxide emissions, but it is easier for some companies than for others, and the practice may be a bridge to future reductions instead of a permanent strategy.

More: The New York Times

Officials on Obama Climate Task Force

The governors of Maryland and Delaware and the mayors of Philadelphia and Hoboken, N.J., are among members of President Obama’s Task Force on Climate Preparedness and Resilience. The group is charged with identifying what governments can do to advance climate-resilient investments.

More: The White House

November 12, 2013

PJM Changing Tier 1 Synchronized Reserve Estimates

PJM is changing the way it estimates Tier 1 Synchronized Reserves and is open to lifting the cap on demand response participation in Tier 2, officials told the Operating Committee last week.

A review of more than 40 Synchronous Reserve events since January 2012 found that only 71% of estimated Tier 1 reserves responded when called upon. The response rate drops to 62% when two outlier events — in which there was over-performance — are excluded.

PJM officials decided to take a look at their estimation methods after an SR call during the Sept. 10 heat wave provided only 12% response.

PJM plans to implement several changes in its methodology by the end of the year:

Cap all units used in the Tier 1 estimate at the lesser of Eco Max or Spin Max (by end of year).
Remove all hydropower units – which don’t respond automatically to synch reserve events — from the Tier 1 estimates (already done).
Remove all combined cycles units from the Tier 1 estimate except units that have submitted a Spin Max < Eco Max (done).
Remove units with a manual dispatch instruction from the Tier 1 estimate (by end of year).
During hot or cold weather alerts, the Degree of Generator Performance (DPG) modifier will be used to adjust the Tier 1 response estimate (by end of year).

Tier 2 Synchronous Reserve Response Performance for Events > 10 Minutes (% of Assignment Provided; Source: PJM Interconnection, LLC) — Tier 2 Synchronous Reserve Response Performance for Events > 10 Minutes (% of Assignment Provided) (Source: PJM Interconnection, LLC)

Units assigned regulation, which are assumed to be able to respond with the MWs outside their regulation band, will remain in the Tier 1 estimate.

Units providing constraint control are expected to respond to a Synch reserve event and will remain in the estimate.

Tier 2 Unchanged

Also unchanged are the Tier 2 calculations. PJM filed new Tier 2 penalty rules for nonperformance Nov. 1 (ER14-297).

The new rules were approved by the Members Committee Oct. 24 in response to concerns that the existing penalties were insufficient to ensure compliance.

Demand response and generation have each provided 59% of requested MWs for Tier 2 events of 10 minutes or longer in 2013, according to a PJM analysis provided last week to the Operating Committee. That was a decline after steady increases in performance from 2009 through 2012.

PJM officials said they don’t know the reason for the fall off in performance. “There’s nothing that jumped out” as a cause, said PJM’s Tom Hauske.

DR Cap

Although the cap on DR participation was raised to 33% last fall, it provided only 224 of the 925 MW (24%), with generation providing the remainder.

DR typically offered between 200 and 250 MWs per hour into the market. Mike Bryson, executive director of system operations, said the decline in SR prices affected the volume of DR bidding into the market, rendering the cap moot.

Asked by EnergyConnect’s Bruce Campbell whether PJM still sees a need for a limit on DR participation, Bryson responded: “I think it’s certainly worth discussing.”

Adam Keech, director of wholesale market operations, said that PJM would need to improve its data collection before considering a change in the cap. About 9% of MWs assigned to DR failed to provide PJM with data in 2013, down from 46% in 2012.

Officials said one concern with removing the cap would be the operational impacts because of differences in the ramp rate of DR versus generation in the first 10 minutes of spin events.

November 12, 2013

PC, TEAC Swap Meeting Dates with MIC

The Planning and Transmission Expansion Advisory committees will swap their meeting dates with the Market Implementation Committee in December.

The PC and TEAC meetings will be held on Wednesday, Dec. 11, rather than their normal Thursday schedule. The MIC will meet on Dec. 12.